The British government suffered another setback on Tuesday when Tulip Siddiq, the minister in charge of financial services and anti-corruption initiatives, resigned due to scrutiny of her financial connections to her aunt, Sheikh Hasina, the ousted Prime Minister of Bangladesh.

Siddiq, who had consistently denied any improper conduct, resigned amidst growing questions about her family's involvement in corruption-related issues in Bangladesh.

Her resignation marks the second departure of a government minister in two months, further challenging Prime Minister Keir Starmer's leadership.

Although Prime Minister Starmer had previously expressed confidence in Siddiq, her exit raises concerns about her family's financial dealings, especially in relation to the investigation in Bangladesh into Hasina's alleged corruption.

The 42-year-old former minister, appointed in July after Labour’s general election victory, was responsible for overseeing financial services policy, including anti-money laundering measures.

However, apprehensions arose about her family’s close ties to Hasina, who governed Bangladesh for over a decade before being ousted last year amid protests.

Siddiq’s involvement in this investigation gained prominence after her name was connected to alleged financial irregularities relating to a $12.65 billion nuclear power contract in Bangladesh, from which she and her family were said to have potentially benefited.

Living in properties linked to Hasina’s supporters, Siddiq referred herself to the government’s ethics adviser as the controversy intensified.

While the adviser found Siddiq did not breach ministerial conduct rules, he noted that she failed to acknowledge the potential reputational risks of her family’s involvement in the Bangladesh investigation.

In a letter to Starmer, Siddiq admitted that her continued role as minister might distract from the government’s work.

Shortly after her resignation, Starmer appointed Emma Reynolds, the former pensions minister, to succeed Siddiq.

The controversy surrounding Siddiq’s resignation also brings attention to the ongoing investigations into Hasina’s administration, where she faces allegations of corruption and money laundering.

The former prime minister and her party have denied the accusations.

Siddiq’s resignation follows that of Transport Minister Louise Haigh, who resigned late last year after admitting to a minor criminal offense related to a phone reporting incident before joining the government.